Piramal reinvests in Indian cleantech firm

The fund manager has backed ACME with a new type of loan after its initial commitment via a joint venture with APG last year.

Piramal Finance Limited (PFL), a subsidiary of India’s Piramal Enterprises, has lent a total of INR7 billion ($108 million; €95 million) to ACME Solar Holdings, according to a press release.

This is PFL’s second investment in ACME and the loan is its first ‘Flexi Line of Credit’ transaction for the renewable energy sector, a new product line of PFL. The line was introduced recently and provides funding to borrowers in the renewable energy sector based on operational projects, with the flexibility to drawdown and repay the lender over a three-year tenure.

ACME is one of the largest Independent Power Producers (IPP) in the solar energy space in India with a portfolio of over 1.8GW. Current operational capacity is over 1.0GW, which is set to reach 1.4GW by the end of September. The company is present across all 14 states.

“We are pleased to offer the second round of funding to ACME group with our unique ‘Flexi Line of Credit’. ACME has a strong track record of execution, with projects spread across the country, which reduces the off-take risk, and has signed PPAs for the complete portfolio,” said Khushru Jijina, managing director at PFL.

The new line will be funded by PFL’s own balance sheet.

According to PFL, renewable energy has been one of the key priorities for the group given the government’s focus on clean energy. The firm expects renewables to be one of the leading contributors to the energy requirements of the country.

Last year, ACME received a five-and-a-half-year loan of INR5 billion from the $1 billion joint venture between Piramal and Dutch pension fund asset manager APG Asset Management. The loan was used to buy out the stakes of the company’s two existing foreign investors and to fund the company’s ongoing projects.

APG is not participating in the second round of investment in the company because the new vehicle requires frequent drawdown and repayment and APG is restricted from this type of loan by FPI (Foreign Portfolio Investors) regulations in India. However, the Piramal-APG platform will continue to actively evaluate transactions.

PFL has total funds under management of $5 billion and recently applied for a housing finance company (HFC) licence. It has strategic alliances with global funds such as Bain Capital Credit, CPPIB Credit Investment and Ivanhoé Cambridge as well as APG.